Vatican budget plunges back into red

VATICAN CITY: The Vatican's budget plunged back into the red last year because of the financial crisis, with a deficit of 14.9 million euros ($18.5 million), the Holy See said Thursday.

"The result was affected by the negative trend of global financial markets, which made it impossible to achieve goals laid down in the budget," it said.

"The most significant items of expenditure were those relative to personnel and to the communications media considered as a whole," it said, citing a group of cardinals who keep tabs on the Holy See's financial health.

The results launch the Vatican back into the economic mire after a positive 2010, when its finances had returned to profit after three years in the red.

The cardinals called "for prudence and limiting costs, though maintaining jobs."

But Peter's Pence donations -- those from churches around the world -- rose to $69.7 million from $67.7 million, while the Vatican bank gave Pope Benedict XVI 49 million euros "to support his apostolic and charitable ministry". The Vatican's administration however ended 2011 with a surplus of 21 million euros -- largely thanks to the Vatican Museums, which drew over five million paying visitors.

"Unanimous pleasure was declared at the generous support of the faithful and of ecclesiastical institutions, even more praiseworthy given the persistent economic crisis," the Vatican said.

The tiny state's finances have been in the headlines, amid rumours that it may fail to pass transparency tests performed by the Council of Europe. Moneyval, the Council of Europe's anti-money laundering experts, is due to rule this month on whether the Holy See meets international monetary standards.

Its bank, officially known as the Institute for Religious Works (IOR), has witnessed financial scandals in the past, amid accusations of involvement in laundering funds, including from the mafia. The Vatican is estimated to own at least 100,000 properties worth around nine billion euros. AFP